I'm new to this tool and uncertain about the figure to input for the actual Real Rate of Return (ROR) in the Asset Allocation Mode subtab. I've opted for the "User Specifies Asset Allocation at the Account Level" mode and chosen Money Markets, Stocks, and Bonds as my asset classes. Specifically, my Stocks allocation pertains to S&P 500 funds, exhibiting a 20-year Compound Annual Growth Rate (CAGR) of 9.61%. To align with this, I intend to input 9% for ROR. However, given the designation "real ROR" and the 3% inflation rate entered in the Home tab, should I deduct this inflation rate and input 6% as the real ROR?
I found the answer on the users manual.
"Real ROR: This is the average rate of return for each asset classes after inflation is removed. You should enter geometric return information, if available, because it accounts for the Historical volatility drag on the returns of a given asset class."
